Live News: Eurozone shows mixed picture as German economy shrinks
The French economy ended 2021 on a high note, beating expectations with growth of 0.7% in the last three months of the year and helping the country achieve its fastest expansion in 52 years.
The national statistics office said average growth in 2021 was 7%, its fastest rate since the peak of the ‘glorious 30’ in 1969, as the economy rebounded strongly from its 8% contraction in 2020 when the coronavirus pandemic first hit.
The euro zone’s second-largest economy returned to its pre-pandemic gross domestic product level in the third quarter, he said, outpacing most major European countries.
France has been boosted by a sharp rebound in consumer spending after the easing of coronavirus restrictions last year. It has benefited from its lesser exposure to supply chain bottlenecks plaguing manufacturing in neighboring Germany.
In the fourth quarter, the economy was fueled by a 0.4% increase in household spending and a 0.5% increase in investment, while changes in inventories also added 0.4 percentage point to the growth. Trade made a negative contribution of 0.2 percent.
That lifted overall output growth above the 0.5% expected by most economists, while marking a deceleration from its 3% growth in the previous quarter.
However, economists expect the French economy to slow further early this year after the country’s daily coronavirus cases peaked at 500,000 this week.
The number of Covid-19 patients in French hospitals has risen above 30,000 for the first time since November 2020.
The government, which plans to ease coronavirus restrictions next month, had previously forecast the economy to grow by 4% in 2022.